Thursday, October 29, 2009

Thank You Cash for Clunkers

Motor vehicles added a whopping 1.66% of the 3.5% growth in Q3 GDP. More specifically, motor vehicle output was up... wait for it... 157.6% on an annualized basis.



Source: BEA

6 comments:

  1. Taking all three of the last posts together as a set - excellent. A suggestion?
    Stimulus spending was the answer but take a look at Inventories. Did rather well. Be interesting to see what I:S ratio does and did too. Bet it's still going down.
    The obvious question is what happens when it fades of course.

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  2. To summarize:

    1) We have stimulus
    2) We have inventory restocking
    3) Do we have REAL private demand (i.e. non-subsidized)?

    Unfortunately, I don't think we'll find out til Q1 '10

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  3. No argument whatsoever. Within that context the question then becomes how big was the inventory re-build? Which might be approachable via our earlier discussion on looking at the historical Inventory:Sales ratio.

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  4. Exactly. However, consider the cost of the program as published by edmunds.com and it is even worst. For my take on today's numbers click on my name.

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  5. Clusterstock ripped you off:

    CHART OF THE DAY: Cash-For-Clunkers MASSIVELY Distorted GDP
    http://www.businessinsider.com/chart-of-the-day-motor-vehicle-output-2009-10

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  6. Thanks for the heads up Barry...

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